Cashback credit cards are a great option for borrowers who religiously pay off their balance in full each month. But the big drawback is that many of these cards charge an annual fee.

However, the good news is Amex has just re-launched its Platinum Cashback Everyday card which is one of the few cashback cards not to charge a fee. Allowing you to earn up to 5% cashback in the first three months and up to 1.25% thereafter, we take a closer look to see if this is the right card for you.

What's the deal?

The Amex Platinum Cashback Everyday credit card (which was initially launched on to the market last October and withdrawn four months later) offers 5% cashback on up to £2,000 of spending within the first three months (up to a maximum of £100 cashback).

After the first three months, cashback rates are tiered so you'll earn 0.5% cashback on spending up to £3,500, 1% on spending between £3,500 and £7,500 and 1.25% on spending over £7,500. There's no restriction on how much cashback you can earn at this point and you'll receive your cashback annually.

There is no annual fee with this card, but it does charge a representative annual percentage rate of 19.9% (variable), so be sure to pay off your balance in full each month.

Who's it good for?

The Amex Platinum Cashback Everyday card is ideal for anyone who pays off their credit card balance in full every single month. It's a good option for those who pay for almost everything on their plastic and want to get something back.

Any catches?

The main catch with the Amex credit card is its high representative APR of 19.9% (variable). If you fail to clear your balance in full each month, the interest you'll pay will soon outweigh any cashback benefits – so don't spend more on your card than you can afford to pay back.

Note also that you'll need to spend at least £3,000 on the card each year in order to earn cashback, but obviously the more you spend, the more you will benefit from this card. For example, spending £5,000 on the card over a year would earn you £88 back, according to Amex, but spending £15,000 would earn you £241.

The Amex Platinum Cashback Everyday card is only available to new customers and you'll need to be at least 18 years old to apply and have a household income of at least £20,000. You'll also need an excellent credit score.

What's the verdict?

If you use your credit card for the majority of your spending and always pay off your balance in full, the Amex Platinum Cashback Everyday card will make a great addition to your wallet. Not only does it allow you to earn a competitive rate of cashback – particularly in the first three months – but unlike the majority of cashback credit cards, there is no annual fee to eat into your earnings.

However, if you are prepared to pay an annual fee, you can earn higher rates of cashback elsewhere - just make sure the amount you're likely to earn back will be greater than the cost of the fee.

The similarly named Amex Platinum Cashback credit card, for example, also offers 5% cashback on up to £2,000 of spending in the first three months but after this, you'll earn a flat rate of 1.25% on all of your spending. In addition, you'll earn double cashback (2.5%) for one month every year providing you have spent more than £10,000 in the previous 12 months.

The card has a £25 annual fee and charges a representative APR of 18.7% (variable).

Alternatively, with the Barclaycard cashback credit card you'll earn an impressive 6% cashback in the first three months, but note that this is only on your five biggest purchases each month and is capped at £120. After this, you'll earn 2% cashback on your top five monthly purchases and 0.5% on the rest of your spending. You'll also get a 4% 'thank you' bonus on your top five purchases in the month after your card 'anniversary'.

The card has a £24 annual fee which results in a representative APR of 24.8% (variable).

Top tip!

If you religiously pay off your credit card balance each month but would prefer not to earn cashback, there are a number of credit cards that allow you to collect reward points instead.

The Lloyds TSB Duo Avios credit card, for example, allows you to collect Avios points which can then be redeemed on flights. The card is actually two credit cards – an American Express card and a MasterCard – and you'll receive one Avios point for every £1 spent on the American Express card and one Avios point for every £5 spent on the MasterCard.

The cards have a representative APR of 17.9% (variable) so make sure you clear your balance every month.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.